You may have noticed that some hotel listings on Google’s Hotel Finder show up with green prices and a “Good deal” tagline, indicating that something special is going on with the rate. There doesn’t appear to be any documentation of this feature in the help, so we’ve often wondered, “What determines a good deal?”

To tackle this question we came up with a few guesses on how this might be determined. Then to test our hypotheses, we pulled the best prices for a number of hotels in New York City being displayed on Hotel Finder, focusing on single night stays from August 1-31st, 2013. When we logged each hotel price, we also noted whether it showed up without any text or with the “Good deal” designation.

Once we had collected all of the data, we created a set of matrices to determine how each price compared to the 30-day average for that property and the average rate in market for that night. (Note that this was more for fun – yes, we’re nerds – than anything else. In the future a more rigorous analysis would probably require that we look at both longer and shorter periods of time, and group hotels by their star rating and price range. We’ve assumed a month-long range here, but there could be something more or less complex going on.)

From the collected data, we came up with three main observations:

1. “Good deal” does not appear to be impacted at all by how many advertisers are offering that specific price. Most of the “Good deal” listings that we found on Hotel Finder in this case were being offered at roughly the same rate (within 1% with all fees included) from all the advertisers bidding on that property.
2. “Good deal” does not appear to be impacted significantly by the average room price in the search area. We observed a number of instances where a property had a comparatively great deal for the market but not a great deal compared to its own average rate and it did not trigger the label.
3. While this quick test is not accurate 100% of the time – in our sample it worked out to about 95% of the time – you can assume that if a property is being offered at more than a 13.5% discount to the average rate over the last 30 days, then it will trigger the “Good deal” text.

Why doesn’t this work out all the time? Our expectation is that the calculation that determines a good deal is a bit more complex and utilizes some additional rules, a different time period, the “low” price observed over a period of time, or some other signal. In the future we’ll do some more evaluation to try to narrow things down even further.

Why should you care?

If you’re an agency for a hotel brand running Hotel Price Ads or a marketer on the corporate side of the business, you might be thinking, “What good does this do me, since I can’t control hotel prices directly?” Well, consider this…

…knowing when the “Good deal” text will show up may allow you to capture more valuable traffic, and inform how you bid on specific hotels.

We know that the folks at Google do significant testing around user experience and even conversion for advertisers, and it’s probably no accident that this tagline is being displayed how it is. Working this type of data into your bid testing plan may help you target more valuable users and drive more efficiency from your campaigns.

Stay tuned and we’ll keep you up to speed on other new Hotel Finder developments. If you’re interested in testing this functionality in your HPA campaign, please feel free to get in touch.